The Prairie Dog Has Always Been Considered a Problem for American

question 251

Essay

The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150 each. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle.
Draw a rancher's production possibilities frontier showing increasing opportunity cost of cattle production in terms of prairie dog production. Using a separate graph for each situation, show what would happen to the initial production possibilities frontier in each of the following situations:
a.The outcome is efficient, with ranchers choosing to produce equal numbers of cattle and prairie dogs.
b.As a protest against the government introducing the gray wolf back into the wild in their state, ranchers decide to withhold 25 percent of the available grassland for grazing.
c.The price of prairie dogs increases to $200 each, so ranchers decide to allot additional land for prairie dogs.
d.The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing.
e.A drought destroys most of the available grass for grazing of cattle, but not for prairie dogs since they also eat plant roots.

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